Zhang v. UnitedHealthCare ( 2022 )

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Rong Zhang, No. CV-20-02064-PHX-GMS 10 Plaintiff, ORDER 11 v. 12 UnitedHealthCare, 13 Defendant. 14 15 16 Before the Court is Defendant Arizona Physicians IPA, Inc.’s (“Defendant”) Motion 17 to Dismiss Plaintiff’s Amended Complaint (Doc. 31)1. For the reasons below, Defendant’s 18 motion is granted. 19 BACKGROUND 20 Plaintiff Rong Zhang (“Plaintiff”) is a Medicare Part C enrollee. He thus receives 21 benefits from a Medicare Advantage Organization (“MAO”), rather than directly from the 22 Government. Defendant is an MAO. 23 The dispute in this case is whether Defendant wrongfully denied Plaintiff coverage 24 for certain dental treatments in September 2019. Plaintiff alleges that he received a root 25 canal treatment in 2015, but “because of the incomplete and unsuccessful treatment, the 26 infection symptoms reappeared on September 2019,” which required retreatment. (Doc. 27 1 Arizona Physicians IPA (“APIPA”) maintains that Plaintiff improperly named 28 “UnitedHealthcare” as the Defendant in this action. APIPA is an affiliate of UnitedHealthcare Insurance. 1 1-3 at 6.) Plaintiff claims that his “retreatment got denied by UHI” and he “was told that 2 [his] plan did cover root canal but not retreatment.” (Id.) In his amended complaint, 3 Plaintiff alleges that since this litigation began, the tooth required extraction because it 4 became “severely sick.” (Doc. 29 at 1.) He seeks compensation for retreatment expenses, 5 the subsequent extraction of the tooth, physical and emotional sufferings, court expenses 6 and the treatment of the tooth in later stages. (Id.) 7 Plaintiff initially filed his claim in state court, and Defendant removed to this Court. 8 After removal, Defendant moved to dismiss for failure to state a claim, but after receiving 9 no response from Plaintiff, the Court dismissed for failure to prosecute. (Docs. 5, 9.) 10 Plaintiff then filed a motion for reconsideration, which the Court granted. (Docs. 11, 14.) 11 After briefing on the first motion to dismiss, the Court granted the motion for lack of 12 subject matter jurisdiction because Plaintiff had not exhausted his administrative remedies, 13 as required. (Doc. 24.) The Court granted Plaintiff leave to file an amended complaint 14 within 30 days of the order demonstrating that he had exhausted administrative remedies. 15 (Id.) Plaintiff filed an amended complaint 90 days later, alleging that he has exhausted 16 administrative remedies or, in the alternative, that he cannot or should not have to exhaust 17 administrative remedies. (Doc. 29.) Defendant then filed the instant motion to dismiss on 18 the grounds that Plaintiff’s amended complaint is untimely, and he has still not exhausted 19 his remedies. (Doc. 31.) 20 DISCUSSION 21 I. Legal Standard 22 Federal Rule of Civil Procedure 12(b)(1) allows a party to move to dismiss a 23 complaint for lack of subject matter jurisdiction. “The party asserting jurisdiction has the 24 burden of proving all jurisdictional facts.” Indus. Tectonics, Inc. v. Aero Alloy, 912 F.2d 25 1090, 1092 (9th Cir. 1990) (citing McNutt v. Gen. Motors Acceptance Corp., 298 U.S. 178, 26 189 (1936)). Federal courts “possess only that power authorized by Constitution and 27 statute,” and therefore “[i]t is to be presumed that a cause lies outside this limited 28 jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). In 1 effect, the court presumes a lack of jurisdiction until a plaintiff proves otherwise. 2 II. Analysis 3 Plaintiff’s First Amended Complaint does not cure the flaws in his initial Complaint. 4 The problem remains the same: Plaintiff has not exhausted administrative remedies, and 5 therefore, the Court does not have subject matter jurisdiction. 6 Claims “arising under” the Medicare Act (“the Act”) are subject to judicial review 7 only if a plaintiff first exhausts his administrative remedies. 42 U.S.C. §§ 405(g)-(h); 8 Heckler v. Ringer, 466 U.S. 602, 614-15 (1984); Do Sung Uhm v. Humana, Inc., 620 F.3d 9 1134, 1141 (9th Cir. 2010) (finding that the district court lacked jurisdiction over the 10 plaintiff’s claims because § 405(h)’s administrative exhaustion requirements were not 11 met). The exhaustion requirement applies whether an enrollee receives benefits under 12 original Medicare or under the Medicare Advantage program. Global Rescue Jets, LLC v. 13 Kaiser Found. Health Plan, Inc., 30 F.4th 905, 914 (9th Cir. 2022) (“[W]e think it evident 14 that Congress intended to impose under the Medicare Advantage program the same 15 administrative exhaustion requirement that applies to claims for benefits under original 16 Medicare.”). A claim can arise under the Act in two circumstances: “(1) where the standing 17 and the substantive basis for the presentation of the claims is the Medicare Act, [or] 18 (2) where the claims are inextricably intertwined with a claim for Medicare benefits.” 19 Uhm, 620 F.3d at 1141 (internal citation and quotation omitted). 20 In a reply to his amended complaint, Plaintiff first alleges that he has exhausted his 21 administrative remedies. (Doc. 36.) Although Plaintiff lists various entities he has 22 contacted regarding his claim, he does not include any final judgment associated with the 23 claim. He indicates that he appealed to UnitedHealthcare Insurance, but his filings do not 24 demonstrate that he has received any response to an appeal determining the merits of his 25 claim. Even if he had received an initial determination from his MAO, that determination 26 would be the first step of multiple appeals required for exhaustion. See 42 C.F.R. § 422.560 27 et seq. (Grievances, Organization Determinations and Appeals for the Medicare Advantage 28 Program). 1 Alternatively, Plaintiff argues that his claim does not arise under the Act because 2 Medicare does not cover dental benefits. (Doc. 29 at 2.) In doing so, he advances the 3 argument that claims for supplemental benefits under a Medicare Advantage plan are not 4 subject to the same exhaustion requirements as claims for benefits that Medicare must 5 cover. To whatever extent this argument could have been raised at the time of briefing, the 6 Ninth Circuit has squarely decided the matter since then. In Global Rescue Jets, the Court 7 considered whether a claim to recover the cost of air ambulance services, a supplemental 8 benefit offered by a Medicare Advantage program, must be administratively exhausted 9 before a district court has jurisdiction to hear it. 30 F.4th at 918. The answer was yes. 10 The Court held that “supplemental benefits offered under a Medicare Advantage 11 plan constitute benefits that are offered under Part C of the Medicare Act. That is true, in 12 our view, because the authority to offer supplemental benefits as part of a Medicare 13 Advantage plan is derived entirely from Part C of the Act.” Id. It further explained, 14 Plaintiff’s “contention that claims for supplemental benefits do not ‘arise under’ the 15 Medicare Act—and are therefore exempt from the administrative exhaustion 16 requirement—is difficult to reconcile with the statute’s text.” Id. 17 The holding in Global Rescue Jets speaks directly to this case. Here, Plaintiff claims 18 he was improperly denied a supplemental benefit under his Medicare Advantage Plan. 19 Although he appears to argue that he should not be obligated to follow the required 20 administrative appeal process because dental benefits are supplemental, it is clear that he 21 must do so. “Congress made determinations regarding an enrollee’s entitlement to basic 22 and supplemental benefits subject to Part C’s administrative review scheme.” Global 23 Rescue Jets, 30 F.4th at 918. Thus, prior to seeking a remedy in this Court, Plaintiff must 24 follow the administrative review process, as outlined in the Medicare Act. 25 Lastly, Plaintiff has not alleged sufficient facts to illustrate that he should be exempt 26 from the exhaustion requirement. The Ninth Circuit has held that “the exhaustion 27 requirement may be excused if three conditions are satisfied: (1) the plaintiff’s claim is 28 wholly collateral to a claim for Medicare benefits; (2) the plaintiff has made a colorable || showing of irreparable harm; and (3) exhaustion would be futile.” Jd. at 919 (citing 2|| Johnson v. Shalala, 2 F.3d 918, 921 (9th Cir. 1992)). Even if the Court liberally construes 3|| Plaintiffs complaint, at a minimum he fails to allege that he faces irreparable harm if he is denied relief prior to a showing of exhaustion. Johnson, 2 F.3d at 921. Thus, the 5 || exhaustion requirement cannot be excused. 6 Because Plaintiff must exhaust administrative remedies before this Court can have 7 || jurisdiction over a case arising under the Medicare Act, Plaintiff's complaint is dismissed 8 || for lack of subject matter jurisdiction. 9 CONCLUSION 10 Accordingly, 11 IT IS THEREFORE ORDERED that Defendant’s Motion to Dismiss □□□□□□□□□□ First Amended Complaint (Doc. 31) is GRANTED.” 13 IT IS FURTHER ORDERED directing the Clerk of Court to terminate this action. 14 Dated this 8th day of December, 2022. 15 Wi 16 A Whacrsay Sooo) 17 Chief United states District Judge 18 19 20 21 22 23 24 > “Ordinarily, when a district court concludes that it lacks subject matter jurisdiction over || an action removed to federal court, the appropriate remedy is to remand the case to state court.” Global Rescue Jets, 30 F.Ath at 920 n.6; 28 U.S.C. § 1447(c). Here, just as in Global Rescue Jets, the “narrow ‘futility’ exception to this general rule” applies, because “there is ‘absolute certainty’ that the state court would dismiss the action following 27\| remand.” Id. (citing Polo v. Innoventions Int’l, LLC, 833 F.3d 1193, 1197-98 (9th Cir. 2016). Because “a state court would be compelled to dismiss this action following remand” | because Plaintiff must exhaust his administrative remedies, this Court may dismiss the action. Id. _5-